ESG Integration and the Investment Climate
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Abstract
This study examines the influence that education on ESG investing has on Houston’s financially
disadvantaged communities. Scarce amounts of disposable income along with inaccessible
financial education discourage under-resourced communities from investing in financial markets.
However, in recent decades, ESG investing has gained traction among investors in the stock
market. ESG investing encompasses intangible factors of a company’s performance, allowing
investors to gain a comprehensive scope of the company and minimizing market risks. This lowrisk nature of ESG investing can incentivize investor confidence among Houston’s underresourced communities. Thus, the purpose of this paper is to examine whether exposing
financially undereducated, low-income citizens in Houston, Texas to ESG investing would
encourage them to engage in financial markets. This study employed a quasi-experimental
approach. A survey categorized participants into control and experimental groups, with the
experimental group being educated on ESG investing. Then, participants were given a list of ten
stocks and company data from July 2015 and asked to hold a “buy” or “sell" position until July
2018. Results indicate that education on ESG integration enhances individuals’ investment
decisions. Based on the results, the conclusions of this research then provide ways to cultivate
sustainable investment climates within Houston’s under-resourced communities.
Notes
Independent research conducted from August 2018 to May 2019; Worked with financially
underprivileged residents of the Gulfton community in Houston, Texas for three months.